Analyst: AT&T may offer tiered data plans for iPhone users

Analyst Shawn Wu thinks Apple has multiple new iPhone models in the works and …

Apple and AT&T may have a harder time moving iPhones in the current economic climate, since they require a significant monthly investment after paying $199 for the entry-level model. Because of this, Kaufman Brothers analyst Shaw Wu thinks Apple is planning to release multiple new models with different capabilities and prices. He also believes AT&T may consider tiered data plans at different price points to satisfy customers' desire for lower monthly fees.

In his note to clients Friday, Wu suggested that Apple had at least one and possibly two other iPhone models in development and planned to diversify the iPhone line, much as it has done with the iPod. However, his ideas for possible alternative models do nothing to significantly differentiate from the standard iPhone hardware and would only serve to dilute the brand.

Like fellow analysts Toni Sacconaghi and Mark Abramsky, Wu seems to havemissed the point of Apple's entry into the mobile market. "Our objective is not to be the unit share leader in the cell phone industry," COO TIme Cook told analysts last month. "It's to build the world's best phones." Apple isn't likely to do anything to dilute the brand it has built and make the iPhone seem less than the best. The company isn't likely to radically change the general platform either, or else it loses its ease-of-development advantage.

However, Wu's suggestion that "due to fear of lower profits, [AT&T] is more open to developing tiered data plans that fit more in line with today's environment," makes perfect sense. The cheapest iPhone plan possible includes a $40 per month voice plan and a $30 per month unlimited data plan. If you ever send text messages, at a minimum you'll want to pay $5 per month for 200 SMS messages. With fees and taxes, most iPhone users are paying at least $80 per month. If you're not a heavy network user, a lower price with a reasonable data cap is likely very appealing.

AT&T would not be alone in offering cheaper service plans. A Comcast customer service representative told me this week that the company is "sensitive to the current economic conditions" and has new pricing packages ready to keep customers from ditching cable service altogether to save money. Likewise, retailers around Chicago are offering special deals—and in some cases, unadvertised discounts—in an effort to keep a positive cash flow. The high minimum monthly fee is an oft repeated complaint against getting an iPhone (or other smarthphones, for that matter), so AT&T would be wise to consider tiered data pricing to attract and keep new customers.

OK, if they want to make the pricing better, first, re-include the 200 TXT messages for free the plan used to have (crap, they're just data anyway, it really should be unlimited TXT...) Next, drop the base plan price! 400 minutes should not cost $40 in today's market. Take $10 off each plan tier price. Next, drop the data price back to $20 (where it also used to be!) and for $20 more include a tethering option. Next, The other carries all have unlimited calling/txt/data plans for $99. That should be the max plan price (excluding tethering), all plan tiers should decline from there (with a minumum between 250 and 400 minutes)

c'mon people, you're buying a DATA device, not a phone. Not having an unlimited data plan is simply assinine. Fact is, the data puts more of a load on their network than the calling does (at least for me). With Pandora alone I'd likely pass my data plan limits pretty quick. Exchange support, chat app, and remote file and music streaming connection to my home machine probably near doubles that. Yea, my wife would probably use 25% of the data I do, but even if the limit was a GB, she'd still pass it more months than not. I'm not half way into my monthly bill and am already at nearly 2GB downloaded this month, with nearly 250MB uploaded.

Originally posted by keihin:How about a plan for light /voice/ users? Say $15 for 150 minutes?

I like the idea of unlimited data, but use very few voice minutes. For me, the iPhone is a pocketable data terminal that happens to include a phone.

Oh, and I'll say it again - In what possible way is text message not data?!? It's ridiculous to charge extra for this.

This++++. Unlimited data is critical to iPhone use, data is one of the main points instead of just having a regular cell phone. Furthermore, any overages get expensive real fast so I'm not sure that tiered plans really represent much savings. What I'm sick of not seeing are plans for people who practically never use the phone part. I talk on my cell phone literally a few minutes a month, on average. It's for emergencies, occasionally ordering food or quick questions, and that's basically it. Text messages are a ripoff too. I'd rather see data paired with a normal "buy your minutes" setup, so $30/month plus $0.25/minute or whatever they're charging now.

Why the hell would ATT want to lower prices at all? As a shareholder, unless they are hemorrhaging customers, I want them to milk the consumer for all he'll give. If people will pay those prices, then charge them. Until it starts to result in a loss of subscribers, keep prices where they are. The fact that you don't like to pay so much doesn't mean it should be lower. Until you start to speak with your wallet, complain all you want but don't expect anything to happen.

Originally posted by Peter N:Why the hell would ATT want to lower prices at all?

From the first sentence of the article: "Apple and AT&T may have a harder time moving iPhones in the current economic climate, since they require a significant monthly investment after paying $199 for the entry-level model."

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As a shareholder, unless they are hemorrhaging customers, I want them to milk the consumer for all he'll give.

Only if you're a weird/dumb shareholder. Most shareholders want them to make the most money they can.

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If people will pay those prices, then charge them. Until it starts to result in a loss of subscribers, keep prices where they are.

Nope, that's not how it works. It's well established that different people will pay different amounts for a service, hence Apple's modus operandi for it's consumer electronics so far: introduce it at a high price, skim all the cream they can (and pay off initial development/ramp up), lower the price a level, get all those people, lower it again until it hits basic profit margins. If Apple and AT&T figure they've mostly saturated the market for the present plans, and that introducing new ones would get many new customers (the old ones will still be paying what they are right now, hooray subscriptions!), then it's totally worth it. Waiting until you're losing people means it's too late, it's really hard to get back people who are leaving because they're angry. Better to anticipate things and keep the momentum up.

Until you start to speak with your wallet, complain all you want but don't expect anything to happen.

Which represents the debate I'm having. I'm not worried so much about the price of the phone itself. It's the two year ball and chain that's worrisome. A $60/month ball and chain. Like xoa said they could do better.

I can see a few ways Apple could differentiate iPhone models by something other than storate that would make sense. I think the most sensible would be an iPhone with a physical keyboard. I'm not saying I'd buy it, but it would help them make inroads with corporate users of the Blackberry, etc. I could also imagine some sort of device that was more focused on media & texting at the expense of general purpose utility, a sort of iPhone nano. Cheaper phone, smaller touch screen unsuitable for a regular keyboard, but ok for predictive input.

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Originally posted by Banzi51:More data plans can only end in tears. Any business that gets into the business of breaking down into tiers means they are going to jack the price up through the roof.

No. Businesses break pricing into tiers to try and better fit the market. Sometimes that means they think they can get more money out of current customers, sometimes it means they think they can get money out of people who are not currently customers, or who who are likely to leave the fold. Given the current economic climate, It's probably some of the former and more of the latter.

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Originally posted by doormat:

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Originally posted by keihin:Oh, and I'll say it again - In what possible way is text message not data?!? It's ridiculous to charge extra for this.

It isn't. A text message is transmitted on voice control channels. Not in a datastream.

Which, at this late date, means that it is broken by design. The popularity of texting isn't exactly recent news.

Originally posted by Dlux:Regarding tiered data plans: I hope one of those tiers includes no data plan.

No counter argument here, just a good old fashioned A-fuckin'-men!

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c'mon people, you're buying a DATA device, not a phone. Not having an unlimited data plan is simply assinine. Fact is, the data puts more of a load on their network than the calling does (at least for me). With Pandora alone I'd likely pass my data plan limits pretty quick. Exchange support, chat app, and remote file and music streaming connection to my home machine probably near doubles that. Yea, my wife would probably use 25% of the data I do, but even if the limit was a GB, she'd still pass it more months than not. I'm not half way into my monthly bill and am already at nearly 2GB downloaded this month, with nearly 250MB uploaded.

Dude, is your life really that devoid of WiFi? That's really sad

The only time I would ever have a need for any data on an iPhone would be driving in my car and needing to look up an address on Google Maps. But I have a TomTom that was less than $100 on Black Friday, and doesn't cost me $80+ a month to use.

WiFi EVERYWHERE else. And I do mean everywhere. Home. Work. Every restaurant, pub, coffee shop, bookstore, cafe, movie theater, airport, hookah bar, etc, etc, etc. Free WiFi too, not that bullshit "AT&T WiFi Hotspot" that Starbucks is hocking. Most are completely open, a few need a password that is given freely if asked for it.

A data plan on any phone, not just iPhone, is completely useless to me, and a waste of money. There's no harm in offering a "No Data" tier. For people that need data, it'll still be there. Calling people asinine for not wanting it is a bit douchey. Just sayin.

In fact, I'm about to be on my way to a pub to join in the worldwide Guinness toast tonight. Their WiFi password is guinness

You should be able to buy a phone and choose the services you need and want.Apple also cut its market share by going with AT&T. Apple needs to get a clue and get the iPhone into other carriers if it wants to continue sales growth.Not everyone is going to want a iPhone and limmiting its growth potential by signing exclusive contracts with one carrier is stupid. Even RIM did not do that!!

c'mon people, you're buying a DATA device, not a phone. Not having an unlimited data plan is simply assinine......

Not if I don't need nor want the data plan. I would gladly pay the up front full price for an iPhone without a data plan. The iPhone has the features I do want; voice, text messaging, camera, music, apps. I just don't need nor want email or internet.